Immigration compliance is a commonly overlooked aspect of the TUPE transfer process. Among the demands of managing a complex transaction and workforce changes, employers remain under an obligation to ensure all workers are eligible to work, or the organisation risks enforcement action being taken against them.

What are the rules relating to right to work checks following a transfer of undertaking? In this article, we explain the legal obligations placed on an incoming employer — even where checks have been previously undertaken by the outgoing employer prior to employing the transferring employees — and the steps employers should take to ensure a compliant transfer and avoid falling foul of the law.

Right to work checks 

Carrying out right to work checks is an essential part of being a responsible and reputable employer.

In the UK, all employers have a statutory duty to prevent illegal working. Under the Immigration, Asylum and Nationality Act 2006, an employer may not employ an adult, subject to immigration control, if that individual has not been granted permission to enter or remain in the UK or if their leave is either invalid, has ceased to have effect or is subject to any condition that prevents them from accepting that employment.

Essentially, as an employer, this means that you are under a legal duty to ensure that anyone you employ, or continue to employ, is not disqualified from working in the UK or from undertaking the work in question by reason of their immigration status.

If you are found to be employing a migrant worker illegally in the UK, unless you can demonstrate that you’ve conducted a right to work check in the prescribed manner, you may be liable to a civil penalty. You will also be at risk of criminal prosecution if you employ someone who you know or even have reasonable cause to believe that they do not have the right to work in the UK.

Where a right to work check has been undertaken, provided this has been carried out correctly, you will have discharged your duty and should be able to establish a statutory excuse against having to pay a penalty, even if someone is later found to be working illegally for you.

TUPE right to work checks

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (the “TUPE Regulations”), any right to work checks carried out by the outgoing employer of a business are deemed to have been carried out by the incoming employer.

In theory, this means that the transferee (incoming employer) will obtain the benefit of any statutory excuse against civil liability established by the transferor (outgoing employer). In practice, however, even where right to work checks have been undertaken before employing someone, the incoming employer will only be able to rely on those checks where they have been conducted correctly in accordance with the latest Home Office guidelines.

If you acquire staff as part of a TUPE transfer, as the transferee you should receive copies of all right to work checks carried out by the transferor as part of the overall TUPE process. However, if there has been an omission or oversight in the way in which the original check was conducted by the transferor, you will still be liable to pay a civil penalty if an employee, who commenced work on or after 29 February 2008, is subsequently found to be working illegally.

Further, any newly acquired staff under a TUPE transfer may include employees with time-limited permission to work in the UK. As such, carrying out checks on all TUPE employees is the only guaranteed way of determining when any follow-up check is needed.

For these reasons, employers who acquire staff in cases of TUPE transfers should always undertake a fresh right to work check on those individuals. You should not rely on assurances from the transferor that they carried out the necessary checks in the correct way. You should also consider seeking a warranty and indemnity cover from the transferor in respect of any liabilities incurred to the point of the transfer, as well as carrying out appropriate due diligence regarding the processes the transferor had in place to prevent illegal working.

When should TUPE right to work checks be conducted?

Undertaking right to work checks before employment continues for individuals acquired as part of a TUPE transfer will often give rise to practical problems. In recognition of the likelihood that an incoming employer will not have direct access to any newly acquired staff until after the transfer has taken place, the Home Office provides a 60-day grace period for any right to work checks to be carried out.

The period of 60 days will run from the date of the transfer of the business and applies in all situations where there is a “relevant transfer” as defined by Regulation 3 of the TUPE Regulations. There is, however, no grace period for any subsequent follow-up checks.

It’s worth noting that where the employer is a corporate body and there has only been a change in the employer’s legal constitution, for example, a change from a partnership to a limited company or a TUPE transfer within the same group of companies, the right to work check does not need to be repeated because of this change. However, this is only the case when the employer is effectively the same entity and is simply changing its’ legal status.

Where there is any doubt whatsoever, it’s recommended that the incoming employer checks the right to work of all their newly acquired staff who commenced employment after 29 February 2008, rather than risking liability for a civil penalty should an employee be found to be working illegally. This must be done no later than 60 days after the transfer date.

How does an incoming employer comply with the right to work check legislation?

To comply with the “right to work check” legislation, any incoming employer should conduct right to work checks on all transferring employees in accordance with the Home Office guidance and Code of Practice. There are two ways in which a right to work check can be conducted: manually or online. By correctly carrying out a check in the prescribed manner within the relevant timeframe, this will give you a statutory excuse to avoid any civil liability.

To benefit from a statutory excuse you must carefully follow the Home Office procedure, including taking reasonable steps to verify the employee’s identity and authenticity of any documentation. A list of acceptable documents from one of two lists — List A or List B — is set out in the guidance. You must take copies of any documents in a format that cannot manually be altered and securely retain copies for the duration of the individual’s employment, plus an additional two years. You should also keep a note of the date when you conducted the check.

For online checks you must retain or print a copy of the profile page confirming the employee’s right to work, the individual’s photo and date on which the check was conducted. You should again store this securely, either electronically or in hard copy format, for the duration of the employment and for two years after this ends.

In most cases you will be able to undertake either a manual or online check, although in certain circumstances, you will need to contact the Home Office’s Employer Checking Service. Further details of when this should be done are set out in the guidance.

Having correctly conducted a right to work check, if that check reveals that an individual’s right to work in the UK is time-limited, you should conduct a follow-up check shortly before this right is due to come to an end to retain continued protection against any civil liability.

EEA workers right to work checks from 1 July 2021

Up until 30 June 2021, EEA nationals had been permitted to use either their passport or national identity card as proof of eligibility to work in the UK. This was the cut-off date for applications under the EU Settlement Scheme for either settled or pre-settled status.

Since 1 July 2021 onwards, with the exception of Irish citizens, all EEA and Swiss nationals will need to produce evidence of their immigration status under either the EU Settlement Scheme or a valid visa.

There is no mandatory requirement for retrospective checks to be undertaken on EEA and Swiss nationals who were employed on or before 30 June 2021. That said, for an incoming employer following a TUPE transfer, you should still conduct a fresh check. This will need to be done using the online service, although the Home Office is due to issue further guidance here.

Penalties for non-compliance with TUPE right to work checks

The consequences of non-compliance with TUPE right to work checks can be serious. If you are found to be employing someone illegally and are unable to establish a statutory excuse, you will be liable to pay a civil penalty of up to £20,000 per illegal worker.

You will also be committing a criminal offence — punishable by imprisonment of up to five years and an unlimited fine — if you know or have reasonable cause to believe that an individual does not have the right to work in the UK and you employ them anyway.

In addition to any civil or criminal liability, there are a range of other possible penalties for employing an illegal worker, from disqualification as a director to revocation of your sponsor licence, not to mention the impact on your business resulting from loss of vital workers or serious damage to your reputation and employer brand.

Other considerations when acquiring migrant workers under a TUPE transfer

When acquiring staff under a transfer of undertaking, in addition to right to work checks, other considerations come into play where sponsored migrant workers are being transferred. In these circumstances, there are further duties on both the outgoing and incoming employer.

For the outgoing employer, they must report the transfer to the Home Office via the sponsorship management system within 20 working days of the transfer date. That report should include, for example, details of all the sponsored migrants who will be moving to the incoming employer and those that will not be moving.

For the incoming employer, if you do not currently hold a valid sponsor licence and sponsored migrant workers are being transferred, you must take steps at an early stage to make an application for a licence. This must be done within 20 working days of the transfer date.

Where you already hold a licence, you must check this covers the relevant categories of transferring sponsored workers. If not, you will need to make an application to extend the scope of your licence to cover these categories within 20 working days of the transfer date.

Need assistance?

DavidsonMorris’ business immigration lawyers are on hand to advise on all aspects of immigration compliance, right to work legislation and dealing with Home Office enforcement action. Working closely with our employment lawyers and HR consultants, we provide a holistic TUPE support service to employers, ensuring immigration compliance duties are met, as well as other workforce-related TUPE issues and obligations. We also provide comprehensive guidance on how to approach and implement organisational change projects to minimise legal risk while ensuring commercial goals are achieved and employee engagement is optimised. For help and advice, speak to our experts.

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Last updated: 28 December 2022